The activation of proto-oncogenes is a general mechanism of carcinogenesis. Induction of breast cancer in mice by the retrovirus, mouse mammary tumor virus (MMTV), results from proviral insertion in the vicinity of one of a series of proto-oncogenes (the wnt-x series) and selective activation of these genes in mammary cells. We have identified at least three separate transcriptional control elements in the MMTV promoter: a tissue-selective enhancer at the 5' end of the LTR, an activity associated with the immediate proximal promoter, and a poorly defined internal region of the viral LTR that harbors a negative transcriptional element. The upstream tissue specificity element may form the basis of mammary-specific oncogene activation. This element can function to activate heterologous promoters in a cell-specific and hormone- independent fashion. We have charac- terized five proteins that act at this locus. Two proteins, mp5 and F3, contribute 80% of the activity of the enhancer. Mp5 is a member of the AP-2 transcription factor family; AP-2 is also important in the activation of c-erb-B2 in human breast carcinomas. Expression of the MMTV promoter was characterized in differentiating mammary cells, using an in vitro model developed by Bissell and colleagues. In addition to the 5' LTR enhancer, sequences between -250 and -50 in the immediate proximal region of the MMTV promoter are required for efficient expression of the promoter in response to cellular differentiation. The -250/-50 region only functions in mammary cells when stably integrated into chromosomal sequences. This region is not active when introduced transiently into cells, indicating that some feature of template architecture is important for the function of this region. We propose that the organized chromatin environment present in replicating chromosomes is necessary for the functional activation of the promoter during cell differentiation.